A contentious auditing standard requiring directors to exhibit their commitment to internal controls through ‘management representation letters’ has been rejected by the UK’s auditing body.

The Auditing Practices Board added its voice to opposition to the standard in the UK – largely made up of top company FDs and investors – in response to a global consultation.

Apart from adding more responsibility to directors – who already have rigorous duties to fulfil outlined in the UK’s Companies Act – ISA 580 also gives auditors the right to refuse to sign off an audit if such letters are not produced.

The standard has been criticised by FDs, who feel auditors will rely on management’s representation letters instead of conducting their own full and thorough audit of the controls.

In its letter to the US-based International Audit and Assurance Standards Board, the APB’s chairman Richard Fleck said: ‘ The terms of [the audit] engagement should make clear the responsibilities set out in relevant laws and regulations and, if necessary, establish such further responsibilities as are necessary to enable the audit to be performed.’